Manufacturers: Treasury Proposal on Derivatives Market a Key Step Forward
04/29/11 - National Association of Manufacturers (NAM) Vice President for Tax and Domestic Economic Policy Dorothy Coleman issued the following statement today regarding the Department of the Treasury’s announcement on foreign exchange swaps and forwards:“The use of foreign exchange swaps is critical for manufacturers of all sizes to guard against fluctuations in foreign currencies that could significantly increase costs. Manufacturers are pleased with Treasury's announced proposal to exempt foreign exchange swaps and forwards from the definition of a "swap" under the Commodity Exchange Act (CEA), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
For many manufacturers, managing fluctuating currency exchange rates is the primary focus of their risk management and hedging programs. In today’s global economy more and more small and medium-sized manufacturers are exporting to new markets, and the proposal announced today would help ensure that they could manage currency fluctuations in a cost-effective manner.
As the U.S. economy continues to recover, it is critical that any new regulations on derivatives not inadvertently hinder economic growth. In particular, regulations that make hedging too expensive will add additional burdens on manufacturers, limiting their ability to expand and create jobs.”